Real Estate

The Unconstitutional Truth about the Presidio

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By John Farrell

 

OPINION When Congress established the Presidio Trust in 1996, it wanted to ensure its financial stability. Congress believed taxing private tenants impeded the Trust’s financial stability, so it enacted provisions within the Presidio Trust Act to ensure that tenants were tax-exempt. The only problem is that Congress doesn’t have the power to exempt tenants under the US Constitution.

In 1897, the State of California ceded to the United States exclusive jurisdiction on all lands held for military purposes, including the Presidio. Military installations are federal enclaves exempt from state authority. Per legal counsel of the State Board of Equalization, a “federal enclave” is a property over which the federal government holds exclusive jurisdiction.

In 1989, the federal government closed the Presidio as a military base. Since the Presidio is no longer for military use, the federal government transferred jurisdiction to the Golden Gate National Recreation Area (GGNRA) in 1994 for natural, historic, cultural, and recreational purposes.

Did this transfer to GGNRA end its tax-exempt status? Did this transfer negate the concept of “federal enclave” and “exclusive jurisdiction,” since the Presidio is no longer used for military purposes? Could the city now tax private beneficiaries? This issue has never been addressed.

The Presidio Trust was created by Congress in 1996 for a dual purpose: to rehabilitate and repurpose historic buildings and environmental resources, and operate as a vibrant public park independent of annual taxpayer funds.

In establishing the Trust, Congress’s concern was with the city’s potential assessment of property tax. In California, any private party that rents or uses space on government-owned property is subject to property tax.

In order to curtail the possible assessment of property tax, Congress enacted legislation signed into law by President Clinton on November 29, 1999. Public Law 106-113 (HR 3194) includes specific language providing that, “The Trust and all properties administered by the Trust and all interest created under leases, concessions, permits and other agreements associated with the properties shall be exempt from all taxes and special assessments of every kind in the State of California, and its political subdivisions, including the City and County San Francisco.”

Our City Attorney and Congressional representative have the opinion that all third party interests for private benefit under the Presidio Trust’s jurisdiction are exempted from taxes by the Presidio Trust Act.

This language confirms Congress’s intent to exempt private tenants from all forms of state and local property taxes. The only problem is that if Congress enacted the Presidio Trust Act to exempt third party beneficiaries, it did not have the authority per Article 1 Section 8 of the Constitution, which provides the Powers of US Congress. In other words, this part of the legislation was unconstitutional.

Because of this unconstitutional loophole, the city is losing at least $10 million annually in property tax and over $100 million since inception. This amount doesn’t include revenue loss from other taxes such as real estate transfer tax. Further, if the George Lucas plan for a Presidio museum is approved, the city will lose at least $8.1 million annually in property tax.

The city is losing an additional $12.5 million from the recent sale of Lucasfilm’s to Disney in 2012 (based on a 2.5 percent transfer tax on a conservative $500 million assessment). An ownership transfer includes a lease of 35 years or more. Lucasfilm had a 66-year lease at the Presidio transferred to Disney. Per the state Revenue and Taxation Code, this is a legal transfer and there is no rational why there is no transfer tax imposed.

The city has decided to adhere to the legislation by Congress to tax exempt tenants even though it is unconstitutional. But everyone should pay their fair share.  

John Farrell is a Realtor, former city budget analyst, and fifth generation San Franciscan.

Crowdfunding apartments

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rebecca@sfbg.com

We caught up with Dan Miller at a cafe in San Francisco’s Financial District, where solitary patrons hovered over laptop screens as they sipped coffee.

Sporting a goatee and collared shirt, Miller, 26, seemed to blend in perfectly. The Washington DC native, a product of the East Coast real estate development world whose father had a hand in developing several iconic properties, was in San Francisco for meetings about FundRise, a startup he and his older brother Ben cofounded. The company is frequently described as being like Kickstarter, but for real estate investment.

Miller has been meeting with representatives from San Francisco’s Office of Economic and Workforce Development, a city agency in the Mayor’s Office. While nobody in City Hall was willing to get specific about those meetings, it seems officials are looking to FundRise for help tackling the city’s bedeviling housing affordability crisis.

Miller has been meeting with economic development offices in cities nationwide, and he’s convinced that housing affordability is a problem everywhere. “But it’s more acute in San Francisco than anywhere else I’ve seen,” he said, “just because of an influx of tech jobs.”

In the last six months, he added, OEWD representatives have seemed increasingly concerned.

The idea of crowd funding real estate is new, and the whole enterprise is still coming to fruition. But the underlying idea is intriguing: Take real-estate investment out of the hands of exclusive multimillion-dollar investment firms, and open it up instead to anybody who happens to have 100 bucks or more to throw in.

In an affluent city like San Francisco, the tool could create wiggle room for more housing projects that are tailored to actual needs, through partnerships with affordable housing developers.

It started when Miller and his brother encountered across-the-board rejection from big investment firms. To hear him tell it, the rise of private equity firms — which have no meaningful connection to the communities they develop — has produced blandness on a sweeping scale.

Objectives like preserving economic diversity, or honoring a community’s wishes, don’t factor in when these firms determine what to fund; they only consider whether an investment is deemed safe and profitable. That means predictable: think obscenely expensive, characterless market-rate condos. And since they’re the dominant financiers, their judgment is the final call.

“We spun off from our family business and started buying old auto warehouses, converting them, leasing them to local tenants,” Miller explained. “We took these projects to private equity firms, and they just didn’t get it. All the decisions they made were predicated on the financial pro forma,” he added, referring to documents that project expected returns. “They were really constraining what’s possible.”

Sounding like a tech person, he pronounced the whole system woefully inefficient. FundRise seeks to take advantage of little-known Securities and Exchange Commission regulations, as well as new provisions under the federal Jobs Act, to give people the opportunity to use crowd funding instead. (It doesn’t eliminate the need to apply for bank loans, which is a different part of the financing picture.)

The idea is that FundRise vets a project’s viability to make sure it won’t result in widespread loss, then helps proponents attract contributions through an online social network.

In the investment world, the vast majority of transactions are made by “accredited” investors, whose net worth equals $1 million or more, or with annual incomes of $200,000 or higher. But there are others out there who might have extra cash to put toward projects they believe in, like, say, affordable housing complexes for seniors — who don’t mind making a lower return.

The Miller brothers have built an online system they hope will connect these would-be lenders with projects in their own communities.

“Since you can invest directly, digitally, you’ve cut out so many middle men,” Miller explained. “You can make a 6, 8, 10 percent return. The real estate investment firm targets are 20 percent. But that’s because there’s just people taking a piece all the way down the ladder.”

The cofounders may be idealistic, but at the end of the day, they’re businesspeople, not activists. Since the company takes a cut of all investment earnings, it could succeed financially even if it the platform only winds up getting used to finance pet projects for dot-com millionaires.

Nevertheless, some longtime champions of low-income housing have recognized its potential to help solve a perplexing puzzle: How to secure capital for affordable housing in a world where investors are hardwired to make as much money as possible.

“We are hoping that as the larger movement for crowd funding works with the SEC, we can have more people make these investments in the local community,” said Tracy Parent, executive director of the San Francisco Community Land Trust.

Her organization is the first nonprofit affordable housing developer to test the waters with FundRise, in a bid to raise $1 million to keep Marcus Books, a historic African American-owned business, in its current Fillmore Street location. Due to a short timeline, they’re confined to accepting funding only from accredited investors. But in the future, they could use the tool to structure a public offering that would allow anyone to contribute toward preserving affordable housing.

While public subsidies will still be needed for below-market housing, “FundRise allows affordable housing developers to take properties off the speculative market,” Parent explained. “Any way we can democratize capital investment,” she added, “will be a good thing for our community.”

SF Board of Supervisors approves new tenant protections

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The Board of Supervisors today (Tues/17) gave unanimous final approval to legislation aimed at giving renters in the city additional protections against being displaced by real estate speculators, and initial approval to legislation protecting tenants from harassment by landlords, both part of a wave of reforms moving through City Hall to address rising populist concerns about gentrification and evictions.

The anti-eviction legislation, created by Sup. John Avalos and co-sponsored by Sups. Eric Mar and David Campos, seeks to preserve rent-controlled and affordable housing by restricting property-owners’ abilities to demolish, merge, and convert housing units, three of the most common ways that affordable housing units are being eliminated in the city.

There was no discussion of the Avalos legislation today as it was approved on second reading, belying last week’s initial discussion, which got a little heated at times. “San Francisco is facing a crisis,” Avalos said last week as he conveyed the importance of passing the ordinance before the end of the year. “We’ve been called on by our constituents to declare a state of emergency for renters in the city.”

Last month, Campos held a high-profile hearing at the board on the city’s affordable housing and eviction crisis, and won approval for his legislation to double how much tenants being evicted under the Ellis Act receive. Today’s board meeting also includes a first reading of legislation by Campos to help protect tenants in rent-controlled apartments from being harassed by landlords seeking to force them out and increasing rents.

“We have heard about tenants being locked out of their apartments. We have heard about loud construction work being done…for the purpose of forcing the tenants out,” Campos said today of his legislation to allow targetted tenants to have complaints heard by the Rent Board rather than having to file a lawsuit. Later, Campos said the legislation sends the message “that is not something that is going to be tolerated in San Francisco.”

Campos’ legislation also received unanimous approval and little discussion, even by supervisors who generally side with landlords over tenants, perhaps including just more potent this issue has become. Board President David Chiu also today introduced a resolution to support his work with Mayor Ed Lee and Sen. Mark Leno to amend the Ellis Act at the state level, hoping to give the city more control over its rent-controlled housing. 

Avalos last week said he is so convinced of the urgency of the current situation that he responded to concerns voiced during the Land Use and Economic Development Committee Meeting on Dec. 9 about how the new legislation would work in the cases of temporary evictions and residential hotels by immediately making amendments to the ordinance without objection.

Nonetheless, further questions arose during the Dec. 10 meeting. Sups. Norman Yee and Katy Tang expressed reservations about the legislation applying in the case of owner move-in (OMI) evictions.

“I would love to support the piece, but this part just doesn’t make sense to me,” Yee concluded. “I’m not getting how it hurts the tenants.”

While Avalos explained that OMI evictions still take affordable housing off the market, he agreed to compromise by reducing the ordinance’s 10-year moratorium on demolishing, merging and converting housing units to five years.

Then, Sup. London Breed spoke up.

“This might not be popular for me to say as a legislator, but I’m very confused,” she began. “I know we have this crisis of Ellis Acts around the city, but I really feel pressured, and that this legislation is being rushed. I can’t support something that I don’t completely understand the impacts of. I just need more time.”

While Breed did not have the chance to review the legislation before the meeting, she had found the time to prepare speeches about President Nelson Mandela’s passing last week and her alma mater Galileo High School’s recent football victory.

Concurring with Breed, Cohen stated, “I understand that we are in a crisis of protecting our rental stock units, but I’m hesitant. Connect the dots for me, how does this save rentals? Or conserve affordable housing? What are we trying to do here?”

Kim reprimanded her fellow board members for not attending the meeting prepared, then stated, “I would support moving the ordinance forward today. The situation we are facing here in the city is extremely challenging…and this legislation is one of the tools we have for it.”

Sup. Scott Wiener and David Chiu echoed Kim’s support, commending Avalos for promptly addressing their former issues with his amendments and additions.

When Cohen used her time on the floor to respond to Kim’s admonition by stating, “I certainly do my homework. I don’t want to be made to feel bad for not getting it on the first time,” Campos suggested that it might be a good time to put the discussion on hold and open the floor for public comments.

While members of the community stepped up to the visitors’ podium, Yee and Campos met at the back of the room while Breed conversed with Sophie Hayward of the Planning Department, who had reviewed the ordinance before it was presented for recommendations. After further discussion with Avalos himself, Yee returned to his seat to speak with Tang. Satisfied with what she learned from Hayward, Breed came over to discuss the ordinance with Campos and Avalos. Cohen remained seated for the duration of the time, speaking with no one.

After the conclusion of public comments, Avalos reiterated the importance of passing the ordinance as soon as possible. “We have been called on by scores, hundreds of people, to preserve this stock,” he stated. “This legislation will help keep families in San Francisco.”

The ordinance was passed unanimously in its first reading, but the fight is not over. Breed for one made it clear that, while she understood the ordinance better after her preceding discussions, she was only giving it her support because she knew the legislation would be up for further review in a week, when all the supervisors will have had time to study it more closely.

With the affordable housing and displacement issues only generating more heat in the last week, today there was only prompt, unanimous approval and no discussion. 

Tech leaders must engage their critics

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EDITORIAL It’s time for San Franciscans to have a public conversation about who we are, what we value, and where we’re headed. In the increasingly charged and polarized political climate surrounding economic displacement, the rising populist furor needs to be honestly and seriously addressed by this city’s major stakeholders.

Whether or not the technology industry that is overheating the city’s economy is to blame for the current eviction crisis and hyper-gentrification, it’s undeniable that industry and it’s leaders need to help solve this problem. They are rolling in money in right now, including tens of millions of dollars in city tax breaks, and they need to offer more than token gestures to help offset their impacts.

As we were finalizing stories for this issue on Dec. 9, the Guardian newsroom was roiled by our rollercoaster coverage of a protest blockade against a Google bus, which has become a symbol for the insulated and out-of-touch nouveau-riche techies in the emerging narrative of two San Franciscos.

Our video of an apparent Google-buser shouting at protesters “if you can’t afford it, it’s time for you to leave” went viral and burned up the Internet (and our servers) even as we discovered and reported that he was actually a protester doing some impromptu street theater.

But there was a reason why his comments resonated, and it’s the same reason why The New York Times and other major media outlets have been doing a series of stories on San Francisco and the problems we’re having balancing economic development with economic security, diversity, infrastructure needs, and other urban imperatives.

Rents have increased more than 20 percent this year, the glut of new housing coming online now is mostly unaffordable to current residents, even that new construction has done little to slow real estate speculators from cannibalizing rent-controlled apartments, and the only end in sight to this trend is a bursting of the dot-com bubble, which would cause its own hardships.

We need this city’s political leaders to convene a summit meeting on this problem, and Mayor Ed Lee and his neoliberal allies need to bring tech leaders to the table and impress upon them that they must engage with their critics in a meaningful way and be prepared to share some of their wealth with San Franciscans. Not only is the future of the city at stake, so is its present, because the housing justice movement won’t be ignored any longer. The good news is that San Francisco has a golden opportunity to test whether democracy can help solve the worst aspects of modern capitalism, offering an example to others if we succeed. But if our political leaders don’t create good faith avenues for meaningful reforms, San Francisco may offer a far messier and more contentious lesson.

Filipino group snubs mayor over evictions

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The board members of a local Filipino heritage organization, with ties to a high-profile eviction defense battle at San Francisco’s International Hotel in the late 1970s, have declined to an accept an award that San Francisco Mayor Ed Lee had planned to extend to them as part of a Filipino American History celebration because they are angry about a growing trend of senior evictions.

In a written statement sent to the media by board member Tony Robles, the Manilatown Heritage Foundation explained that it couldn’t accept the award as long as “elders are being preyed upon, evicted and given a de facto death sentence thereof.”

The Manilatown Heritage Foundation board members were informed by Board of Supervisors President David Chiu that Lee had planned to recognize the I-Hotel as part of an annual cultural history celebration at City Hall, the statement noted.

“Part of the occasion was to honor the I-Hotel and its many tenants and activists for its contribution to Filipino American history,” board members explained.

In 1976, the I-Hotel was targeted for demolition, prompting a historic eviction defense battle led by housing activists who rallied to the defense of the impacted tenants. As a young attorney who worked with the Asian Law Caucus, Ed Lee was involved in that fight — as an activist defending tenants’ rights to stay. He frequently referred to this chapter of his personal history while running for mayor in 2011, to demonstrate his sensitivity to concerns about affordable housing.

But now that Lee is well into his mayoral term, a surge of evictions of low-income seniors is worsening on his watch. Tenant defense organizations such as Eviction Free San Francisco are showing up outside landlords’ homes and offices to protest eviction notices that threaten to push low-income seniors with few options out of the city.

“The I-Hotel fight was for dignity and it lived by the premise that housing is a human right,” the group’s statement explained. “The fight for the I-Hotel galvanized the community around the fight for affordable housing, particularly for seniors who sacrificed much and on whose shoulders we stand. The fight included tenants, elders, activists, artists and students who recognized that the real estate developers and financial interests were out of control—power unchecked.” 

Angered by senior evictions, Filipino American activists decline award

The board members of a local Filipino heritage organization, with ties to a high-profile eviction defense battle at San Francisco’s International Hotel in the late 1970s, have declined to an accept an award that San Francisco Mayor Ed Lee had planned to extend to them as part of a Filipino American History celebration because they are angry about a growing trend of senior evictions.

In a written statement sent to media by board member Tony Robles, the Manilatown Heritage Foundation explained that it couldn’t accept the award as long as “elders are being preyed upon, evicted and given a de facto death sentence thereof.”

The Manilatown Heritage Foundation board members were informed by Board of Supervisors President David Chiu that Lee had planned to recognize the I-Hotel as part of an annual cultural history celebration at City Hall, the statement noted. “Part of the occasion was to honor the I-Hotel and its many tenants and activists for its contribution to Filipino American history,” board members explained.

In 1976, the I-Hotel was targeted for demolition, prompting an historic eviction defense battle led by housing activists who rallied to the defense of the impacted tenants. A significant fixture in what was once a predominantly Filipino neighborhood known as Manilatown, the I-Hotel housed 196 tenants, predominantly low-income Filipino immigrants. 

“The I-Hotel fight was for dignity and it lived by the premise that housing is a human right,” Manilatown Heritage Foundation members explained in the written statement. “The fight for the I-Hotel galvanized the community around the fight for affordable housing, particularly for seniors—who sacrificed much and on whose shoulders we stand. The fight included tenants, elders, activists, artists and students who recognized that the real estate developers and financial interests were out of control—power unchecked.” 

The fight dragged on, at one point more than two thousand people surrounded the building to blockade the doors in an effort to prevent an eviction from going forward. The battle over the I-Hotel also brought on a famous San Francisco episode in which then-Sheriff Richard Hongisto served five days in his own jail for refusing to carry out the eviction order. In the end, the tenants were finally ousted. But the epic battle ultimately helped to produce a different outcome, many years later: The property became the site of low-cost senior housing, complete with a commemorative display in the interior documenting the dramatic I-Hotel fight.

As a young attorney who worked with the Asian Law Caucus, San Francisco Mayor Ed Lee was involved in that fight – as an activist defending tenants’ rights to stay. He frequently referred to this chapter of his personal history while running for mayor in 2011, to demonstrate his sensitivity to concerns about affordable housing.

But now that Lee is well into his mayoral term, a surge of evictions of low-income seniors is worsening on his watch. Tenant defense organizations such as Eviction Free San Francisco are showing up outside landlords’ homes and offices to protest eviction notices that threaten to push low-income seniors with few options out of the city. Some evictions have caught the attention of mainstream media, such as the ouster of elderly Chinatown couple Gum Gee Lee and Poor Heung Lee and their disabled daughter, Shiuman Lee.

Some advocates have proposed legislative solutions; meanwhile, the situation has evidently become so criticial that even city’s Human Services Agency is seeking outside assistance to provide eviction prevention services for elderly and disabled tenants facing Ellis Act evictions.

And today, the board of the Manilatown Heritage Foundation drew a line in the sand to send Lee a clear message by refusing to accept the honor of recognition in the current housing climate. So far, mayoral spokesperson Christine Falvey has not responded to the Bay Guardian’s request for comment in response to the Manilatown Heritage Foundation’s statement.

“Given the current state of San Francisco housing by forces out to make a killing by killing our communities, we as the torch bearers of the I-Hotel struggle and in the memory of its displaced elders and advocates Al Robles, Bill Sorro, Felix Ayson, Wahat Tampao and others, cannot, in good consciousness, accept any honor or award while elders are being preyed upon, evicted and given a de facto death sentence thereof. And it doesn’t matter if the honor is bestowed by Mayor Lee, President Obama or the pope. We have to say no.”

Here’s the full statement from the Manilatown Heritage Foundation. Here’s an historical essay about the I-Hotel from Shaping San Francisco’s digital archive at FoundSF.org.

Fight back to save your home

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By Tommi Avicolli Mecca and Fred Sherburn-Zimmer

OPINION The good news from San Francisco these days is that tenants are fighting back in a big way to save their homes. Speculators and investors intent on making a killing in a sizzling real estate market are not always having an easy time getting rid of those who stand between them and obscene profits.

While tenant resistance has become a hot ticket item in the local mainstream media, legislators are introducing a slew of new laws aimed at curbing speculation and the housing crisis. Even the Mayor’s Office has gotten into the act, intervening in at least two recent high-profile evictions: the Lee family and 1049 Market.

A low-income elderly Chinese couple and their disabled daughter, the Lee family chose to stay and fight when the Sheriff’s Department gave them notice that it was coming to lock them out after an Ellis Act eviction. Hundreds showed up in support, with a large number of people willing to block the door and risk arrest. TV went live from the protest. Within no time at all, the Mayor’s Office stepped in to negotiate with the landlord for more time so that the Lees could find an affordable place to live. While the Lee family didn’t ultimately get to stay, their struggle brought public attention to what is happening here in San Francisco.

When the tenants in the artist live/work lofts at 1049 Market received letters from their new landlord saying that the city was forcing him to evict them because of an outstanding code violation from 2007 that he inherited when he bought the building, they didn’t take it lying down. It wasn’t true that the city was making him evict anyone. He had the option to bring the building up to code, something he found “economically infeasible.”

Tenants from 1049 Market contacted Housing Rights Committee where we work, and we helped them organize. We were afraid the landlord’s other two buildings on the same block might meet the same fate. The story made the cover of the San Francisco Examiner about a week later.

Suddenly, the Department of Building Inspection announced that it had discretion in terms of the code violations, especially the costliest of them. DBI’s deputy director sent the notice of violation back to its staff for review. The city began meeting with the landlord to try and prevent the tenants from being evicted.

Negotiations are still in progress, but the fact that the City has stepped in so aggressively on the side of the tenants is a major victory. Of course, it’s due to tenants fighting back when so many people told them they couldn’t win.

Jeremy Mykaels, a gay disabled man who’s lived in the Castro for the past 40 years and in his current apartment for almost 18, decided not to move when new owners (investors from Atherton and Union City) threatened him with an Ellis eviction. They went through with it after he turned down a buyout.

Eviction Free San Francisco, a direct action group, organized protests in SF, Atherton, and Union City. Attorney Steve Collier of Tenderloin Housing Clinic challenged the eviction in court. A judge just threw out the eviction on a technicality. The jury is out on whether the investors will start the process all over again. Fight back. It could save your home. 

Tommi Avicolli Mecca and Fred Sherburn-Zimmer work at the Housing Rights Committee.

Shit happened (Oct. 23-29)

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Tenant proposals and Guardian forum address eviction crisis

Tenant advocates have proposed a sweeping set of legislative proposals to address what they’re calling the “eviction epidemic” that has hit San Francisco, seeking to slow the rapid displacement of tenants by real estate speculators with changes to land use, building, rent control, and other city codes.

“In essence, it’s a comprehensive agenda to restrict the speculation on rental units,” Chinatown Community Development Center Policy Director Gen Fujioka told the Guardian. “We can’t directly regulate the Ellis Act [the state law allowing property owners to evict tenants and take their apartments off the rental market], but we’re asking the city to do everything but that.”

The package was announced Oct. 24 on the steps of City Hall by representatives of CCDC, San Francisco Tenants Union, Housing Rights Committee of SF, Causa Justa-Just Cause, Tenderloin Housing Clinic, UNITE HERE Local 2, Community Tenants Association, and Asian Americans Advancing Justice.

“San Francisco is falling into one of the deepest and most severe eviction crises in 40 years,” SFTU Director Ted Gullicksen said. “It is bad now and is going to get worse unless the city acts.”

The announcement came a day after the Lee family — an elderly couple on Social Security who care for their disabled daughter — was finally Ellis Act evicted from its longtime Chinatown home after headline-grabbing activism by CCDC and other groups had twice turned away deputies and persuaded the Mayor’s Office to intervene with the landlord.

But Mayor Ed Lee has been mum — his office ignored our repeated requests for comment — on the worsening eviction crisis, the tenant groups’ proposals, and the still-unresolved fate of the Lees, who are temporarily holed up in a hotel and still hoping to find permanent housing they can afford.

The package proposed by tenant advocates includes: require those converting rental units into tenancies-in-common to get a conditional use permit and bring the building into compliance with current codes (to discourage speculation and flipping buildings); regulate TIC agreements to discourage Ellis Act abuse; increase required payments to evicted tenants and improve city assistance to those displaced by eviction; require more reporting on the status of units cleared with the Ellis Act by their owners; investigate and prosecute Ellis Act fraud (units are often secretly re-rented at market rates after supposedly being removed from the market); increase inspections of construction on buildings with tenants (to prevent landlords from pressuring them to move); prohibit the demolition, mergers, or conversions of rental units that have been cleared of tenants using no-fault evictions in the last 10 years (Sup. John Avalos has already introduced this legislation).

“The evidence is clear. We are facing not only an eviction crisis but also a crisis associated with the loss of affordable rental housing across the city. Speculative investments in housing has resulted in the loss of thousands affordable apartments through conversions and demolitions. And the trend points to the situation becoming much worse,” the coalition wrote in a public statement proposing the reforms.

Evictions have reached their highest level since the height of the last dot-com boom in 1999-2000, with 1,934 evictions filed in San Francisco in fiscal year 2012-13, and the rate has picked up since then. The Sheriff’s Department sometimes does three evictions per day, last year carrying out 998 court-ordered evictions, Sheriff Ross Mirkarimi told us, arguing for an expansion of city services to the displaced.

At “Housing for Whom?” a community forum the Guardian hosted Oct. 23 in the LGBT Center, panelists and audience members talked about the urgent need to protect and expand affordable housing in the city. They say the current eviction epidemic is being compounded by buyouts, demolitions, and the failure of developers to build below-market-rate units.

“We’re bleeding affordable housing units now,” Fred Sherburn-Zimmer of Housing Right Committee said last night, noting the steadily declining percentage of housing in the city that is affordable to current city residents since rent control was approved by voters in 1979. “We took out more housing than we’ve built since then.”

Peter Cohen of the Council of Community Housing Organizations actually quantified the problem, citing studies showing that only 15 percent of San Franciscans can afford the rents and home prices of new housing units coming online. He said the housing isn’t being built for current city residents: “It’s a demand derived from a market calculation.”

Cohen said the city’s inclusionary housing laws that he helped write more than a decade ago were intended to encourage developers to actually build below-market-rate units in their projects, but almost all of them choose to pay the in-lieu fee instead, letting the city find ways to build the affordable housing and thereby delaying construction by years.

“It was not about writing checks,” Cohen said. “It was about building affordable units.”

Discussion at the forum began with a debate about the waterfront luxury condo project proposed for 8 Washington St., which either Props. B or C would allow the developer to build. Project opponent Jon Golinger squared off against proponent Tim Colen, who argued that the $11 million that the developer is contributing to the city’s affordable housing fund is an acceptable tradeoff.

But Sherburn-Zimmer said the developer should be held to a far higher standard given the obscene profits that he’ll be making from waterfront property that includes a city-owned seawall lot. “Public land needs to be used for the public good.”

Longtime progressive activist Ernestine Weiss sat in the front row during the forum, blasting Colen and his Prop. B as a deceptive land grab and arguing that San Francisco’s much ballyhooed rent control law was a loophole-ridden compromise that should be strengthened to prevent rents from jumping to market rate when a master tenant moves out, and to limit rent increases that exceed wage increases (rent can now rise 1.9 percent annually on rent controlled apartment).

“That’s baloney that it’s rent control!” she told the crowd. (Steven T. Jones)

Students fight suspensions targeting young people of color

Sagging pants, hats worn indoors, or having a really bad day — the list of infractions that can get a student suspended from a San Francisco Unified School District school sounds like the daily life of a teenager. The technical term for it is “willful defiance,” and there are so many suspensions made in its name that a student movement has risen up against it.

The punishment is the first step to derailing a child’s education, opponents said.

Student activists recognize the familiar path from suspensions to the streets to prisons, and they took to the streets Oct. 22 to push the SFUSD to change its ways. Around 20 or so students and their mentors marched up to City Hall and into the Board of Education to demand a stop of suspensions over willful defiance.

A quarter of all suspensions in SFUSD for the 2011-12 school year were made for “disruption or defiance,” according to the California Department of Education. Half of all suspensions in the state were for defiance.

When a student is willfully defiant and suspended, it’s seen as a downward spiral as students are pushed out of school and onto the streets, edging that much closer to a life of crime.

“What do we want? COLLEGE! What are we gonna do? WORK HARD!” the students shouted as they marched to the Board of Education’s meeting room, on Franklin Street.

They were dressed in graduation gowns of many colors, signs raised high. They smiled and danced and the mood was infectious. One driver drove by, honked and said “Yes, alright!” Assorted passersby of all ethnicities cheered on the group. The students were from 100% College Prep Institute, a Bayview tutoring and mentoring group founded in 1999 aiming to educate students of color in San Francisco. Their battle is a tough one. Though African American students make up only 10 percent of SFUSD students, they accounted for 46 percent of suspensions in 2012, according to SFUSD data. Latinos made up the next largest group, at 30 percent. (Joe Fitzgerald Rodriguez)

Techies to NSA: Stop spying on us!

Thousands of privacy and civil liberties activists, including many from the Bay Area, headed to Washington DC for an Oct. 26 rally calling for surveillance legislation reform, in response to National Security Agency spying programs. It was organized by more than 100 groups that have joined together as part of the Stop Watching Us coalition. The group has launched an online petition opposing NSA spying, and planned to deliver about 500,000 signatures to Congress. Many of the key drivers behind Stop Watching Us, from the Electronic Frontier Foundation to Mozilla, are based in San Francisco. (Rebecca Bowe)

Reclaiming death

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news@sfbg.com

DEATH ISSUE Death is the Grim Reaper come to collect his dues, a silent, bewildered specter bound in black, this undeniable truth that we avoid at all costs. But it doesn’t have to be.

Beginning in Northern California, a growing movement has mounted an attack against death as we know it. They call themselves “death midwives.” Part ferry operator for the dying, part guardian of those left behind, these home funeral guides are committed to transforming our experience of death.

“Most people in this country have no exposure to death,” Jerrigrace Lyons, a prominent death midwife based in Sebastopol, tells us. “The references they do have are negative; it’s frightening, it’s ghoulish, it’s a failure. We need something realistic that shows death to be beautiful and graceful, with a lot of compassion and love and honoring involved.”

The most expensive party you never wanted to have, funerals in America have become a multibillion-dollar industry. Between the fees for completing the necessary paperwork, transporting the body, embalming, flowers, headstone, and casket, funerals cost an average of $7,000. (This is excluding the price of a cemetery plot, an 8 by 4-foot piece of real estate that can cost $5,000.) The services only take a few hours.

“Everything happens so fast,” Lyons says. “People need more time.”

Nearly two decades and 350 corpses have taught her that there is nothing more important for a family than having time with the body to grieve. This is just one part of the death process that we have lost touch with.

“Death is such a sacred and holy thing, and we have commercialized it,” Heidi Boucher, a veteran death midwife in Sacramento, tells us. “The funeral industry has made it really mysterious and creepy, so people are afraid of death.”

Americans once took care of their dead in the privacy of their own homes. During the Civil War, embalming became popular as a way to preserve dead bodies. Meanwhile, more people were dying in hospitals, distancing the living from death.

painting a coffin

When funeral directors established a monopoly on the legal right to embalm, we were separated even further from death. Today, most people have no idea what to do with a dead body. Even if they did, there are enough laws and restrictions around death to daunt almost anyone grieving over the loss of a loved one.

Paying someone thousands of dollars to deal with it no longer seems unreasonable. But handing our dead over to funeral homes might come at an even greater cost than we realize.

“When a body’s taken away, it’s taken out of the hands of the family,” Lyons explains. “There’s no direct care of the deceased, no personal involvement. There’s no way for the family to feel empowered by knowing that they’ve done everything they could to give their loved one a great send-off.”

TIME TO GRIEVE

Working as an ER and ICU nurse, Robin Russell saw a lot of death, but she was struck by how people feared death. No one wanted to talk about it, as if the word would summon the Angel of Death if said out loud.

Inspired by the open recognition of it with humor and color that she witnessed in Mexico during Dia de los Muertos, Russell began searching for a way to change how people understand death in this country. What she found was Lyons.

“I realized that one of the reasons we are so afraid of death is because it has been removed from us, by the body being taken away, filled with embalming fluids, made-up and dressed-up by strangers, and placed in a casket for a memorial conducted in an unfamiliar place, for an allotted period of time,” Russell says.

So she enrolled in Lyons’ death midwife certification program. As midwives offer care and support during and after births, death midwives give the same attention and guidance during and after deaths — from making sure that the dying are comfortable to counseling them about what is coming and helping them make arrangements.

When death comes, midwives turn their attention to the living, assisting the families and friends in caring for their loved ones at home. This can include helping them bathe and dress the deceased, preserving the bodies in dry ice, and completing all of the necessary paperwork to have a legal home funeral. With the aid of a death midwife, families can keep their dead at home with them for up to three days.

making your own coffin

When Boucher first started working with the dying 30 years ago, she was one of few death midwives. But Americans have grown more environmentally and economically conscious in recent years, making home funerals increasingly appealing.

Death midwives offer funeral directors’ expertise at a fraction of the cost, sometimes for free. They advocate forgoing caskets in favor of cheaper, greener options like cardboard boxes or even just a shroud.

Expensive frills like elaborate flower arrangements and guest books are done away with, along with toxic ones like embalming. The movement is still very small — Boucher estimates that there are 100 death midwives in the US — but practitioners are optimistic about its future.

“Many people don’t know about this, but 99 percent of the ones I talk to who do are totally into it,” Boucher claims. “We just need to educate people. That’s the only way that anything’s going to change in this country in regards to how we perceive death.”

Lyons has taught 400 people and had 150 graduates from around the world since she started her death midwife certification program in 2000. In coming years, she foresees the home funeral movement growing as much as the birth midwife movement did in the ’60s.

“When the person’s kept at home for several days, it normalizes death a lot,” Lyons states. “The family is there, making everything beautiful and natural. There’s the comfort of the home, the privacy. And it isn’t just for the family. It’s also for the person in transition.”

 

PROCESSING DEATH

When Carol Singler had a home funeral for her father in 2012, she swore she could feel his spirit there with them. Lyons had made things easier for Singler in every way that she could, guiding her through the process and even driving her downtown to drop off the necessary paperwork. Lyons recommended a cardboard box that people could decorate instead of a casket.

“When somebody dies, it feels like if you could give them something of your heart, then you would know everything was at peace. This gave us the opportunity to do that,” Singler remembers. “Decorating the box with paint and collages, putting all of our love into it for my dad, we had tremendous emotional processing. We talked a lot about death and dying. By the time we finished, my nephew, who had taken the death really hard, was saying to me, ‘I never knew it could be like this. I don’t feel afraid of death anymore. I want to die like this.’ If my father had just been whisked away, that would have been the end of it. Nothing would have happened to really heal our hearts.”

Singler’s husband is dying of lung cancer. The doctors predict that he has a month and a half to live. She wants him have a home funeral assisted by Lyons too, so that their grandchildren can have the same opportunity to process their grandfather’s death.

Kim Gamboa’s teenage son Kyle committed suicide five months ago by jumping off the Golden Gate Bridge. Another mother put her in contact with Boucher, and, within hours of Kyle’s death, she was at the Gamboas’ house, explaining and arranging things.

Boucher was prepared to answer the usual concerns about legality and decaying. Gamboa attended a home funeral a decade ago. At the time, she wondered how the family could stand having a dead body in the house. Once it was her own son’s funeral, however, she had no apprehensions. “When it is actually your loved one, you have such great comfort in having them home with you,” Gamboa explains. “I had wanted to do everything for him, for his soul, and then it turned out to be everything for us, and the community, to help us say goodbye.”

kyle funeral

For three days, Gamboa and her husband kept their house open to everyone who wanted to visit Kyle. They placed his body in an open casket in their living room, surrounded by flowers and candles. Kyle’s many team jerseys hung on the walls and the pictures and letters his visitors brought crowded the fireplace mantel.

“I do not know how I could have dealt with this or the world without having all of that time to talk to him, to kiss him, to touch him,” Gamboa reflects. “Bringing everyone over provided incredible support and strength, and a sense of closure. We could all grieve and share the happy times that we had with Kyle. It gave us three more days with our son to say goodbye. I can’t even describe how much that helped.”

 

 

 

 

 

 

Tenant groups propose sweeping package to ease the “eviction epidemic”

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Tenant advocates today proposed a sweeping set of legislative proposals to address what they’re calling the “eviction epidemic” that has hit San Francisco, seeking to slow the rapid displacement of tenants by real estate speculators with changes to land use, building, rent control, and other city codes.

“In essence, it’s a comprehensive agenda to restrict the speculation on rental units,” Chinatown Community Development Center Policy Director Gen Fujioka told the Guardian. “We can’t directly regulate the Ellis Act [the state law allowing property owners to evict tenants and take their apartments off the rental market], but we’re asking the city to do everything but that.”

The package was announced this morning on the steps of City Hall by representatives of CCDC, San Francisco Tenants Union, Housing Rights Committee of SF, Causa Justa-Just Cause, Tenderloin Housing Clinic, UNITE HERE Local 2, Community Tenants Association, and Asian Americans Advancing Justice.

“San Francisco is falling into one of the deepest and most severe eviction crises in 40 years,” SFTU Director Ted Gullicksen said. “It is bad now and is going to get worse unless the city acts.”

The package includes: require those converting rental units into tenancies-in-common to get a conditional use permit and bring the building into compliance with current codes (to discourage speculation and flipping buildings); regulate TIC agreements to discourage Ellis Act abuse; increase required payments to evicted tenants and improve city assistance to those displaced by eviction; require more reporting on the status of units cleared with the Ellis Act by their owners; investigate and prosecute Ellis Act fraud (units are often secretly re-rented at market rates after supposedly being removed from the market); increase inspections of construction on buildings with tenants (to prevent landlords from pressuring them to move); prohibit the demolition, mergers, or conversions of rental units that have been cleared of tenants using no-fault evictions in the last 10 years (Sup. John Avalos has already introduced this legislation).

“The evidence is clear. We are facing not only an eviction crisis but also a crisis associated with the loss of affordable rental housing across the city. Speculative investments in housing has resulted in the loss of thousands affordable apartments through conversions and demolitions. And the trend points to the situation becoming much worse,” the coalition wrote in a public statement proposing the reforms.

Evictions have reached their high level since the height of the last dot-com boom in 1999-2000, with 1,934 evictions filed in San Francisco in fiscal year 2012-13, and the rate has picked up since then. The Sheriff’s Department sometimes does three evictions per day, last year carrying out 998 court-ordered evictions, Sheriff Ross Mirkarimi told us, arguing for an expansion of city services to the displaced.

At “Housing for Whom?” a community forum the Guardian hosted last night in the LGBT Center, panelists and audience member talked about the urgent need to protect and expand affordable housing in the city. They say the current eviction epidemic is being compounded by buyouts, demolitions, and the failure of developers to build below-market-rate units.  

“We’re bleeding affordable housing units now,” Fred Sherburn-Zimmer of Housing Right Committee said last night, noting the steadily declining percentage of housing in the city that is affordable to current city residents since rent control was approved by voters in 1979. “We took out more housing than we’ve built since then.”

Peter Cohen of the Council of Community Housing Organizations actually quantified the problem, citing studies showing that only 15 percent of San Franciscans can afford the rents and home prices of new housing units coming online. He said the housing isn’t being built for current city residents: “It’s a demand derived from a market calculation.”

Cohen said the city’s inclusionary housing laws that he helped write more than a decade ago were intended to encourage developers to actually build below-market-rate units in their projects, but almost all of them choose to pay the in-lieu fee instead, letting the city find ways to build the housing and thereby delaying construction by years.

“It was not about writing checks,” Cohen said. “It was about building affordable units.”

Last night’s discussion began with a debate about the waterfront luxury condo project proposed for 8 Washington Street, which either Props. B or C would allow the developer to build. Project opponent Jon Golinger squared off against proponent Tim Colen, who argued that the $11 million that the developer is contributing to the city’s afforable housing fund is an acceptable tradeoff.

But Sherburn-Zimmer said the developer should be held to a far higher standard given the obscence profits that he’ll be making from waterfront property that includes a city-owned seawall lot. “Public land needs to be used for the public good.”

Longtime progressive activist Ernestine Weiss sat in the front row during the forum, blasting Colen and his Prop. B as a deceptive land grab and arguing that San Francisco’s much ballyhooed rent control law was a loophole-ridden compromise that should be strengthened to prevent rents from jumping to market rate when a master tenant moves out, and to limit rent increases that exceed wage increases (rent can now rise 1.9 percent annually on rent controlled apartment.

“That’s baloney that it’s rent control!” she told the crowd.

 

 

 

 

 

 

 

 

 

Vote “no” on everything

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All this year’s candidates are unopposed incumbents, which is lame. It’s a sign of an unhealthy democracy that we don’t even have a choice. Why isn’t anyone running? The citywide races on this ballot have no term limits and no public financing, so we’re stuck with career politicians until they decide to move on. Even if they’re okay at their jobs, that’s problematic.

We aren’t necessarily opposed to Treasurer Jose Cisneros or City Attorney Dennis Herrera. They each have admirable accomplishments on their résumés, but they aren’t the type of pioneering progressive leaders that we’re comfortable endorsing in uncontested elections — and Herrera has a couple ugly marks on his record (gang injunctions and invalidating a people’s referendum on Bayview/Hunters Point development).

We are, however, strongly opposed to the Guardian’s endorsements of Carmen Chu and Katy Tang. Back in the day, they worked together in Mayor Gavin Newsom’s budget office. Then he appointed Chu as District 4 supervisor and Tang became her legislative aide. Then Mayor Ed Lee appointed Chu as Assessor and it was Tang’s turn to be District 4 supervisor.

Are you sensing a trend? If Tang goes on to serve two full terms, the Sunset will go from 2007 until 2022 without a contested election. That’s crazy pants!

Odds are that will also mean 15 years without the District 4 supe ever disagreeing with the mayor. Chu was on the opposite side of virtually every contested vote The League has ever cared about: free Muni for youth, the Sit-Lie law, increasing the hotel tax, Election Day voter registration, and CleanPowerSF.

Tang hasn’t been around long, but she’s already voted against CleanPowerSF and carried the mayor’s water by trying to weaken John Avalos’s Due Process for All ordinance. She attempted to insert exceptions that would’ve made undocumented San Franciscans unsure if they could call the police without risking family members’ deportation. When she used the fearmongering image of the city becoming a “safe haven for criminals,” she was rightfully booed by hundreds of immigration and domestic violence advocates in the audience.

And then there’s the golden rule of politics: Follow the money! Chu and Tang have racked up over $150,000 each. Huge chunks of that money come from developers, property managers, consultants, and others looking to strike it rich with land use deals approved by the new board.

That’s especially troubling for Assessor-Recorder Chu. She’s responsible for assessing property taxes, most of which come from skyscrapers downtown. She should be all up in the business of those corporations: Every time a building changes hands or a company’s ownership changes, the company owes a real estate transfer tax. But Chu is buddy-buddy with the Building Owners and Managers Association, taking piles of cash from the real estate industry. That sucks.

This business of the mayor appointing his buddies who then go on to win uncontested races has got to stop. It’s troubling that the mayor — our executive branch — unilaterally fills out our legislative branch. Hello? Did the folks writing our City Charter ever hear of “checks and balances?”

We think all mayoral appointees should be placeholders, legally prohibited from running in the following election. None of this pledging not to run and then “changing your mind” (we’re looking at you, Ed Lee). That reform would be a proposition we could say yes to — and a welcome change of pace from this November’s ballot.

The San Francisco League of Pissed Off Voters is an all-volunteer local chapter of the National League of Young Voters.

Commodifying urban real estate hurts the culture of big cities

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When urban real estate is turned into merely a commodity — or just another safe place for the wealthy to park their cash in uncertain economic times, while also providing pied-a-terres in which to crash a few times a year — it tears at the social fabric of big cities such as San Francisco, New York City, and London.

That’s been the message in some excellent, widely circulated articles in the last week or so — including David Byrne’s Guardian article about New York City and “London’s Great Exodus” in Sunday’s NY Times — and it’s one that San Franciscans should be thinking about as we work through current eviction and gentrification battles and vote on the 8 Washington project through Props. B&C in a few weeks.

It’s also something that we’ll be discussing at Housing for Whom?, a free community forum that the Guardian is sponsoring on Oct. 23 from 6-8pm at the LGBT Center, 1800 Market Street, featuring opponents and proponents of those measures along with other activists and experts.

While both London and New York City may be ahead of the curve in letting capitalists and the real estate market drive away creative types and destroy what once made those cities great, San Francisco isn’t far behind, particularly given its current housing and economic development policies.

Another striking article on the issue comes from San Francisco Urban Research Association Executive Director Gabriel Metcalf, who wrote an article published in The Atlantic on Monday. It repeats his previous calls for San Francisco to build 5,000 new housing units per year and opens with a line many of us have uttered: “My friends keep moving to Oakland.”

But Metcalf (who hasn’t yet returned my calls for comment) also takes this familiar observation and his promotion of market rate housing a step further, basically calling for San Francisco and Oakland to start acting as one city: Rich people in SF, cool people and workers in Oakland, ala Brooklyn and Manhattan.

“If we were one city, San Francisco could spend some of its incredible wealth on the things Oakland needs, like hiring more cops and teachers, not to mention more transit connections between the two cities,” Metcalf writes. “This is not an argument for annexation but a call to think about the answers to our problems from a regional perspective. We can’t solve affordable housing or transit access within the limits of any one city.”

Actually, I’d argue that we can and should solve these problems within our borders rather than just ceding San Francisco to the wealthy. Yes, regional planning is good, and yes, there are things that San Francisco can do for Oakland (perhaps starting with not poaching it professional basketball team).

But regionalism isn’t the same thing as plutocracy — and San Francisco is still worth fighting for rather than just letting it go to the highest bidders.

 

No room left in San Francisco for an artist who helped make the Mission what is

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After four decades living and creating art in the Mission, iconic San Francisco artist and curator Rene Yañez is being threatened with eviction.

Yañez made local history in 1972 when he brought Dia de los Muertos, the Mexican holiday honoring the dead, to San Francisco. The parade through the Mission District every Nov. 2 quickly became a Bay Area tradition, drawing thousands of people each year.

He founded the Galeria de la Raza and brought Latin America’s premier artists and photographers to showcase their work there. When the Museum of Modern Art rejected the work of a little-known Mexican woman, it was Yañez who gave a young Frida Kahlo a space to exhibit her paintings. He taught art classes for youths in the community and offered crucial support to many of the Mission’s mural projects.

In 1998, the San Francisco Foundation awarded Rene the “Special Trustees Award in Cultural Leadership.” Now, the man who has contributed so much to the culture of this city finds himself on the verge of being expelled from it.

Rene’s impending eviction from the house on San Jose Avenue where he has lived for the for 35 years is producing a fierce reaction. Fellow artist and personal friend Guillermo Gómez-Peña recently released an open letter expressing his outrage and rallying for public support of Rene’s cause.

“You are being physically and culturally evicted,” Gómez-Peña writes. “Shame on this city! Shame on the greedy landlords and politicians! Your sadness is ours…A city without Rene Yañez…can’t be called San Francisco.”

Gómez-Peña’s cry to action will be answered tomorrow (Sat/12) at 2pm at the Brava Theater on 24th Street with Our Mission: No Eviction, a march in protest of the Ellis Act, the law used to evict all of the tenants living in the five-unit house on San Jose, including Rene, his partner Cynthia, his former wife Yolanda, and his son Rio. (For more on tomorrow’s event and the city’s eviction trend, see our Politics blog).

On Saturday, Oct. 26, Brava Theater in the Mission will host “Our Mission: No Eviction!” a fundraiser in honor of Rene and Yolanda featuring art and performances.  All proceeds from ticket sales to the event will go to the legal expenses of fighting the eviction, as well as Rene and Cynthia’s medical bills; both the artist and his partner are currently battling cancer.

“They were kind of at peace that this would be their home when they passed away, in the community they’ve put so much into,” Rio told us. “Cynthia could be dying or dead while they are in the process of moving.”

Under the Ellis Act, Rene and Cynthia qualify for a year-long postponement of their eviction because of their illness, a fact which their landlord, Sergio Iantorno of Golden Properties, LLC, neglected to tell Rene when he offered him $21,000 and a years’ free rent if he accepted his eviction immediately.

Consulting his lawyer, Raquel Fox, Yañez was informed about the legal extension and proceeded to successfully apply for it. Even without her advice, though, Yañez would not have accepted Iantorno’s offer. As Rio explained, that amount is nowhere near enough for Rene and Cynthia Yañez to get another place in San Francisco, especially in the neighborhood that they call home.

“They are in their 70s. They aren’t looking for a huge buyout so that they can start a new life,” Rio told us.

When their original landlord died 13 years ago, Yañez and his fellow tenants pooled their money to make a bid for the house. Golden Properties saw their offer, and doubled it. Now, they are banding together again to refuse Iantorno’s money and fight  the eviction.

“I would rather take my chances and fight it,” Yañez told the Guardian. “And also I see it as resistance to what is going on and affecting a lot of people.”

On Oct. 1, the San Francisco Rent Board released its Annual Statistical Report for fiscal year 2012-2013. The report revealed a 36 percent increase in eviction notices since the year before. Evictions from rent-controlled apartments in particular are at an 11-year high.

The Ellis Act was used 81 percent more than last year, providing the basis for almost 10 percent of all evictions. The law was used with greatest frequency by landlords in the Mission District. Meanwhile, city public health officials estimate that someone earning minimum wage would need to work more than eight full-time jobs to be able to afford a two-bedroom apartment downtown.

“It is a disaster,” states Christopher Cook, an organizer with the nonprofit group Eviction Free Summer. “Individuals, families, and increasingly small businesses are being hammered by these twin tsunamis of evictions and dramatic rent increases. Those two factors have been driving people out of the city in ever greater numbers for the past 10 to 15 years.”

Gómez-Peña blames these changes on the mass of high-paid young people produced by the second dot-com boom. They may work in Silicon Valley, but they play in San Francisco, and this new class of wealthy young techies can and will pay any price to live in the city—especially the Mission District.

“I see them everyday, the hordes of iPad and iPhone texting zombies, oblivious to us and our lives, our inspirations and tribulations,” he writes. “I see them in my building and on the street, invading the city with an attitude of unchecked entitlement, taking over every square inch and squeezing out the last drops of otherness.”

It is no easy task to make room for all that wealth when the majority of the city’s residents are renters protected by law against unfair rent increases, landlord mistreatment, and unwarranted evictions. The actual strength of these safeguards may be waning, though, leading Gómez-Peña to warn the public in his letter that, “As renters our hours here are numbered.”

The only way to evict a tenant in San Francisco is by claiming one of 15 “just cause” reasons for removing them. Among those 15, the Ellis Act is something of a landlord’s dream date, skipping all the talking to get straight to the action—eviction. Established in 1985, the California law gives landlords the unconditional right to evict tenants if they are “going out of business.”

In order to implement the Ellis Act, a landlord must evict all of the tenants in his or her building, giving them 120 days notice, and wait five years before they can put the units back on the rental market at an increased price. However, the law does not prevent landlords from renting the units out as short-term lodgings, or converting them to be sold as one massive unit, tenancies in common or condominiums.

“Ellis Act evictions are impossible to fight,” admitted Ted Gullickson, the head of the San Francisco Tenants Union. This makes them an ideal weapon against rent control, which has allowed residents from lower income brackets to hold onto their homes in San Francisco for decades while the values of the real estate grew and grew. Even then, many tenants do not feel secure. Guerra has heard stories about people with rent control living for decades without hot water, working windows, heat, or even a stove. “To have this amazing rent control,” she concludes, “they put up with substandard living.”

When something broke in their building, Yañez and his family often did not even tell the landlord about it. If they did ask him to fix something, and he ignored their request, no complaints were ever made. “Because of rent control, we tried to keep a low profile,” Yañez acknowledges. “We tried not to bother the landlord or make too much of a fuss, because we did not want to find ourselves in this position.”

Rene has been aware of how precarious his situation is for years. Iantorno attempted to evict him multiple times. He watched as neighbors, nonprofit organizations, and local artists accepted their own eviction notices without a fight. When he first opened the Galeria in 1970, Yañez had a list of artists living in the Mission that neared 200 names. Today, it does not even reach 20.

“Since 2000, they’ve started this thing in the Mission,” he states. “They were very quiet about it at first, but now it’s accelerating. Willie Brown started it, this trend of redevelopment, eviction, displacing people without consideration. He opened up this gaping wound in the Mission, and now these developers are throwing salt on it, trying to kill the patient,” he chuckles. “People get really upset when somebody paints over a mural, like, ‘It has history, it has value, it’s been here for years,’ but they don’t have anything to say if the muralist gets evicted.”

Legally, there is not much that Yañez and his family can do in the coming year to stop their eviction. Even an advocate like Cook admits, “You can’t reverse an Ellis Act. All you can do is fight it, try to make it clear that it’s not worth the landlord’s while, that they’re gonna be in for a world of headaches, costs, and public shaming if they do this.”

Yañez has not accepted the eviction, but he is preparing for the worst, searching for a new home for Cynthia and himself. He continues to scour the Mission, in vain. “I love the Mission,” he explains. “I’ve been there 40 years. I adopted it, it adopted me. And it needs cultural preservation,” he says, curling his hands into fists that bang the air. “We saved the community from really greedy people who had absolutely no interest in who we were as a people. They just saw us as savages standing in the way of them making money. That attitude is still here. It’s actually worse than ever—unregulated and devastating. When I see the trucks moving people out, older people who have no idea where they’re going, sometimes they go downtown to the hotels—I just think it’s really heartless,” he finishes, his eyes wide in earnesty.

Guardian of San Francisco culture that he may be, Rene and Cynthia Yañez will be forced to leave the city in search of somewhere more affordable if their eviction occurs. In that event, there is little chance that the elderly man will be able to return to the city to curate SOMArts annual Dia de los Muertos exhibition as he has every year since he began it.

“I’m hoping that I can hang in. It’s a throw of the dice, but I still have some miles left in me,” he says, his eyes drooping wearily.

There is a chance that the exhibition, which opened today (Friday/11), might be Yañez’s last. Every year, he changes the theme. This November, the Dia de los Muertos exhibition is dedicated to all the living battling cancer, and  all the dead for whom that battle is over. Each piece is haunting, and all together it is a stunning collection encompassing a range of ages and races to touch any and every person that sees it. Like a loved one lost to cancer, the exhibit leaves you wanting more, yet so grateful fpr what you have experienced.

His last or not, it is something that Yañez can be very proud of.

Friends in the shadows

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rebecca@sfbg.com, joe@sfbg.com

It’s a simple fact of life: Money buys influence. But in San Francisco, despite strict sunshine laws to illuminate donations to city agencies and gifts to the regulators from the regulated, money still circulates in the shadows when it flows through the coffers of “Friends” in high places.

Major real estate developers, city contractors, and large corporations often lend financial support to San Francisco city departments, to the tune of millions of dollars every year. But the money doesn’t just flow directly to city agencies, where it’s easily tracked by disclosure laws. Instead, it goes through private nonprofits that sometimes label themselves as “Friends Of…” these departments.

They include Friends of City Planning, Friends of the Library, a foundation formerly known as Friends of the San Francisco Department of Public Health, Friends of SF Environment, and Friends of San Francisco Animal Care and Control.

The Friends pay for programs the departments supposedly cannot cover on their own. Bond money can build a skyscraper, but sometimes not fill it with furniture. Agencies are barred by law from funding an employee mixer or a conference trip, so departments turn to their Friends to fill in the gaps. Adding bells and whistles to city websites, holding lunchtime lectures, hiring a grant writer — or, in the case of the Department of Public Health, bolstering health services for vulnerable populations — these are all examples of what gets funded.

The extra help can clearly be a good thing, but the lack of transparency around who’s giving money raises questions — especially if it’s a business gunning for a major contract or a permit to build a high-rise.

City agencies receive outside funding from a wide variety of sources. Sometimes grants are made by the federal government, or a well-established philanthropic foundation — and according to city law, gifts of $10,000 or higher must be approved by the Board of Supervisors. But in the case of organizations like Friends, which are created specifically to assist city government agencies, the original funders aren’t always identifiable. And the collaboration is frequently much closer, with city staff members serving on Friends boards in a few cases.

the circle of donations to "friends of" foundations

Friends board members told the Guardian that their partnership with government helps bolster city agencies in a time of increasing austerity, in service of the public good. But do the special relationships these influential insiders hold with high-ranking city officials come into play when awarding a contract, issuing a permit, making a hiring decision, or determining whether a developer’s request for a rule exemption should be honored? Without more transparency, it’s tough to tell.

City disclosure rules state that any gift to a department must be prominently displayed on that department’s website, along with any financial interest the donor has involving the city. But Friends and other outside funders are under no obligation to share their supporters’ names, much less financial ties, when they distribute grants. Meanwhile, the disclosure rules that are on the books seem to be frequently ignored, misunderstood, or unenforced, our investigation discovered.

How are donors repaid for their support? Consider the controversy earlier this year around Pet Food Express, which won approval in June for another store in the Marina District despite opposition from four locally owned pet stores in the area that fear competing with a large national chain. Pet Food Express won the unlikely support of the city’s Small Business Commissioners, some of whom reversed their 2009 positions opposing the chain’s previous application.

SF Animal Care and Control Director Rebecca Katz personally lobbied the commission to support Pet Food Express, at least partially because the company has donated pet supplies valued at $50,000 to $70,000 per year to the department. That’s a lot of money for a cash-strapped city department, but a pittance compared to the profits of an expanding national chain.

It’s moments of clarity like those, when the public can easily trace the line from donations to political influence, that show why disclosure is so crucial. But those moments are few and far between when trying to trace the funders of private foundations and Friends organizations, where deals often happen in the dark.

 

WHEN DEVELOPERS ARE FRIENDS

At the Merchant Exchange Building in May, a crowd of high-profile real-estate developers mixed and mingled with city planners, commissioners, and even Mayor Ed Lee, wine glasses in hand. Sources told the Guardian that most of the planning staff was present, and not all were happy about having ribbons and name tags affixed to their shirts, as if they were being auctioned off.

With around 500 in attendance, the event was an annual fundraiser hosted by the Friends of San Francisco City Planning, a nonprofit organization that accepts contributions of up to $2,500 per individual to lend a helping hand to the Planning Department. This year’s event was titled “Incubator Startups, New Jobs for the Future,” hinting that the development community shares the mayor’s affinity for new tech startups and the droves of high-salaried IT professionals they’ve attracted to the city.

Some Friends of City Planning board members are major real-estate developers who routinely seek approval for major construction projects. Others are former planning commissioners, or have a background in community advocacy.

Amid widespread concern about displacement, gentrification, and the overall character of San Francisco’s built environment, no city department has greater influence than Planning. An individual’s interpretation of the Planning Code can carry tremendous weight; it’s a series of small decisions that shape a project’s profits and the look and feel of San Francisco’s future. And with cranes dotting the city’s skyline and market-rate construction catering to the wealthy while middle income residents get priced out, the amount of capital flowing through the development sector these days is astonishing.

In this dizzy climate, there might seem to be something askew about affluent developers and land-use attorneys rubbing elbows with city regulators, all eager to pass the hat for the Planning Department. Whiff of impropriety or no, the fundraiser appears to be totally legal.

“We aren’t violating the law — that I know,” Friends of City Planning Chair Dennis Antenore told the Guardian. “We’ve had legal advice on that for years.”

There is close collaboration between Friends of San Francisco City Planning and the Planning Department — a partnership so entrenched that it’s almost as if the nonprofit is an unofficial, private-sector branch of the agency.

“We are certainly thankful and appreciative,” Planning spokesperson Joanna Linsangan told the Guardian. “They’ve helped us for many, many years.” The additional funding is needed, she said, because “there isn’t a lot of wiggle room” in the departmental budget.

Each year, Planning Director John Rahaim submits a wish list to the Friends, outlining projects he wants funding for. This year, he requested $122,000 for a variety of initiatives, including training support to help planners assess proposals for formula retail (read: chain stores). That’s a hot-button issue lately, and one that shows how seemingly small decisions by planners can have big impacts.

When the department’s zoning administrator ruled that Jack Spade, a high-end clothing chain that opened up in the old Adobe Books location on 16th Street, wasn’t considered formula retail and therefore didn’t need a conditional use permit, neither widespread community outrage nor a majority vote by the Board of Appeals could reverse that flawed decision. It was a similar story with the Planning Commission’s Oct. 3 approval of the 555 Fulton mixed use project, where Planning Department support for exempting the grocery store for the area’s formula retail ban made it happen, to the delight of that developer.

Even though the planning director makes specific funding requests each year to the Friends and pitches the projects in person at their meetings — and the Friends publishes a list of the grants it awards to the department online — the Planning Department is not reporting those gifts to the Board of Supervisors.

“I confirm that the Planning Department did not receive any gifts,” Finance and IT Manager Keith DeMartini wrote in official gift reports submitted to the Board of Supervisors for the years 2011-12 and 2012-13. Those reports were sent to the board on Oct. 7 and Oct. 4, respectively, well after the July filing deadline and after the Guardian requested the missing reports.

The Friends typically funds two-thirds of the requests, said board member Alec Bash, totaling around $80,000 a year. In 2012, the Friends awarded a $25,000 grant to make the department’s new online permit-tracking system more user-friendly, making life a lot easier for developers.

When asked what safeguards are in place to prevent undue influence when the director is soliciting funding from a nonprofit partially controlled by developers, Linsangan responded, “those are two very separate things. One does not influence the other.”

She stated repeatedly that planners are not privy to information about individual contributors — but the fundraisers are organized by a board that includes identifiable developers, and anyone who attends can plainly see the donors in attendance. Nevertheless, Linsangan insisted that planners would not be swayed by this special relationship, saying, “That’s simply not the way we do things around here. We do things according to the Planning Code.”

But as the ruling on Jack Spade shows, as well as countless rulings by planners on whether a project is categorically exempt from the California Environmental Quality Act, interpreting the codes can involve considerable discretion.

The public can’t review a list of who wrote checks to the Friends of San Francisco City Planning for the May fundraiser. Since the organization waits a year between collecting the money and disbursing grants, donors stay shielded from required annual disclosures in tax filings.

But Antenore says the system was established with the public interest in mind. “We don’t reveal the contributors, because we don’t want anybody to have increased influence by a donation,” he insisted. Bash echoed this idea, saying the delay was to “allow for some breathing room.”

Unlike some of his fellow board members from the high-end development sector, Antenore has a history of being aligned with neighborhood interests on planning issues, helping author a 1986 ballot measure limiting downtown high-rise development. He emphasized that the developers on the Friends board are balanced out by more civic-minded individuals.

Still, developers who regularly submit permit applications for major construction projects sit on the Friends board. Among them are Larry Nibbi, a partial owner of Nibbi Bros.; Clark Manus, CEO of Heller Manus Architects; and Oz Erikson, CEO of the Emerald Fund development firm.

“We’re not making use of [the funding] in a way that benefits these people,” Antenore said. “I wouldn’t do this if I thought otherwise. I have been careful to maintain the integrity of this organization.” The money is meant to facilitate better planning, he added. “I don’t think there’s any conspiracy,” he said. “We’re not financing anything evil.”

Both the Planning Department and its Friends dismissed the idea that the donations could open the door to favoritism or undue influence. So why isn’t the department reporting gifts it receives from the Friends to the Board of Supervisors, or disclosing them on its website, as required by city law?

According to a 2008 City Attorney memo on reporting gifts to city departments, when an agency receives a gift of $100 or more, it “must report the gift in a public record and on the department’s website. The public disclosure must include the name of the donor(s) and the amount of the gift [and] a statement as to any financial interest the contributor has involving the city.”

John St. Croix, director of the San Francisco Ethics Commission, confirmed that’s the current standard, telling us, “The actual disclosure should be on the website of the department that received the gift.”

Linsangan said records of the gifts are indeed available — listed as “grants” in the department’s Annual Report. But while the 2011-12 report lists grants from sources such as the Metropolitan Transportation Commission and the Environmental Protection Agency, there was no mention of Friends of City Planning.

The memo also says any gift of $10,000 and above must first be approved by a resolution of the Board of Supervisors. But last year, when the Friends provided $25,000 to upgrade the permit-tracking system, it wasn’t sanctioned by a board resolution. Asked why, Linsangan made it clear that she was not aware of any such requirement.

As is common, when it comes to adhering to disclosure laws, confusion abounds. And sometimes, only sometimes, politicos get caught.

 

READING UP ON DISCLOSURE LAWS

When the head of a city agency fails to report gifts totaling $130,000, how much do you think he is fined?

City Librarian Luis Herrera failed to report receiving that amount in gifts and he was fined exactly $600 by the California Fair Political Practices Commission on Sept. 19. Specifically, Herrera had to file a form 700 with the FPPC to state the gifts he received. From 2008-2010, the forms he turned in had the “no reportable interests” box checked.

The money was used in what he calls the City Librarian’s Fund, which is the money he keeps on hand to pay for office parties and giving honorariums to poets and speakers who perform at the library’s branches, money that wasn’t disclosed on the very forms designed for reporting it.

There are two stories of how the fine came about. Longtime library advocate James Chaffee said that it was the result of a complaint he filed with the FPPC in April, and indeed, he sought and obtained many public documents revealing the money trail. San Francisco Public Library spokesperson Michelle Jeffers disagreed, saying that the fine was the result of an ongoing conversation with the FPPC to figure how exactly to file the gifts appropriately.

“The law wasn’t clear around these forms and it wasn’t clear if he had to report them,” she told the Guardian. “For amending the reports you have to pay a $200 fine for every year it was proposed. We keep scrupulous records on every pizza party we have.”

When government officials receive “gift of cash or goods,” they must report them annually in statements of economic interest, known as a Form 700, to the city Controller’s Office. The form is kind of a running tally of who is receiving gifts from whom, a way for the public to track money’s influence in government.

The gifts came from the Friends of the San Francisco Public Library, another nonprofit that bolsters city agency funding. Now Herrera has to list the $130,000 gifts from fiscal years 2008-09 and 2009-10 on his website.

What exactly does that accomplish? As it turns out, not a whole lot.

City Administrative Code 67.29-6 defines the reporting of gifts to city departments, and one of those requirements is to make a statement of “any financial interest the contributor has involving the city.” Now that Herrera lists the Friends of the San Francisco Public Library as donors on the department website, the statement of financial interest by the friends group is this: “none.”

There are myriad donors to the Friends of the SFPL, and the group doesn’t have to state the economic interests of its donors, or even mention who its donors are. The code requires gifts be reported to the controller, and the deputy city controller told us this doesn’t apply to the “friends of” organizations, or any nonprofit foundation arms of city departments.

“If gifts are made to a department, yes, they have to disclose, so people don’t get preferential interest in getting city contracts,” Deputy Controller Monique Zmuda told us. “I know it’s a fine line. The foundations don’t provide us with anything.”

Friends of the SFPL doesn’t provide money just for pizza parties. A breakdown of a funding request from the library to its Friends shows requests up to $750,000 to advertise the library on Muni and in newspapers, funding for permanent exhibits, and the City Librarian’s personal fund. That’s just the money it gives to the library. Other monies are spent directly on activities supporting the library.

As Jeffers pointed out to the Guardian, the money isn’t spent on “trips to Tahiti.” Friends of the SPL do good city works, from a neighborhood photo project in the Bayview branch library to providing books for children. But the question is: Who’s buying that goodwill and why?

The millions of dollars in donations made to the Friends of the SFPL don’t need to be approved by the Board of Supervisors, like gifts to departments do. They’re not checked for conflicts of interest or financial interest by any governmental body. Donors give and the Friends of SFPL spend freely, financial interest or not.

When our research for this story began, no financial statements were available of the Friends of the SFPL website. After a few days of inquiries, the most recent year’s financial statements from 2011-12 were posted to the website.

Ultimately, the San Francisco Public Library is one of the smaller city departments, with an annual budget that hovers around $86 million. The Department of Public Health is a much bigger beast, with a 2011-12 budget of around $1.5 billion.

One of its main foundations, the San Francisco General Hospital Foundation, is also one of the largest nonprofits that supplements city spending. In many ways, it could be described as the model of disclosure for city foundations, although its disclosures are not by law, but by choice.

 

FOUNDATION OF FRIENDS

The Department of Public Health relies on a few entities that fundraise on its behalf: the San Francisco Public Health Foundation, the Friends of Laguna Honda Hospital, and the San Francisco General Hospital Foundation.

“They’re private nonprofit entities that are separate from the department,” CFO Greg Wagner told us. “But their roles are to support the department in its efforts.” He cited examples such as sending its staff to conferences or hosting meetings, “things that we don’t have the budget for or don’t have the staff or resources.”

The lion’s share of the DPH’s gifts are funneled through the SFGHF. Unlike many of the assorted Friends groups or foundations that support city services, the SFGHF extensively reports the sources of its $5 million in donations. The donors include a veritable who’s who of San Francisco: the Giants, Sutter Health, Xerox, Pacific Union, and Kohl’s all donated between $1,000 and $10,000 in the past two years.

But the largest gifts to the SFGHF came from Kaiser Permanente, and its financial interests in the city run deep. Kaiser came into the city’s crosshairs in July, when the Board of Supervisors passed a resolution calling on Kaiser to disclose its pricing model after a sudden, unexplained increase in health care costs for city employees. Kaiser holds a $323 million city contract to provide health coverage, and supervisors took the healthcare giant to task for failing to produce data to back up its rate hikes.

In the meantime, Kaiser has also been a generous donor. It contributed $364,950 toward SFGHF and another $25,000 to SFPHF in fiscal year 2011-12.

The funding from Kaiser and a host of other contributors — which include Chevron, Intel, Genentech, Macy’s, Wells Fargo (another city contractor), and a pharmaceutical company called Vertex — does support needed programs. They include research into the health of marginalized communities, services through Project Homeless Connect, screening for HIV, and immunization shots for travelers.

But because DPH doesn’t count much of this support as “gifts” formally received by the city, it isn’t subject to prior approval by the Board of Supervisors, or posted on the department’s website along with the contributors’ financial interests. Major contributions are disclosed in a report to the Health Commission, something Wagner described as a voluntary gesture in response to commissioners’ requests.

“Most gifts to foundations are donations to a nonprofit and do not come through the city or DPH at all,” he noted.

This distance is maintained on paper despite close collaboration with the department. In the case of Project Homeless Connect, a program that holds a bimonthly event to aid the homeless, it supports programs headquartered in city facilities. Penny Eardley, executive director of SFPHF— which used to be called Friends of San Francisco Public Health — noted that her organization occasionally makes grants or seeks funding in response to department requests. And Deputy Director of Health Colleen Chawla is a foundation board member. It’s almost like these foundations are extensions of the department, except they’re not.

SFPHF also earns revenue as a city contractor. When DPH received a grant from the Centers for Disease Control, it contracted with SFPHF to manage subcontracts with about a dozen community-based organizations.

The web gets even more tangled. The president of SFPHF is Randy Wittorp — who’s also Director of Public Affairs for Kaiser Permanente’s San Francisco Service Area. It’s a similar story with SFGHF, whose board includes several General Hospital administrators, including CEO Susan Currin.

Former Health Commissioner James Illig said people shouldn’t worry, that hospital the staff would never direct foundation funds to pet projects or mishandle funds. They maintain a separation and a firewall,” he said, for example noting, “Sue Currin is not directing funds to her own hospital.”

But he did admit that since SFGHF’s minutes are not public documents, that “raises a few concerns,” arguing the public should be able to inspect financial documents to decide if the foundations are directing funds lawfully to city departments.

Even when the public by law has a right to access financial records of a city department, rooting out corruption can be like pushing a boulder up a San Francisco hill.

 

FROM PATIENTS TO PARTIES

In 2010 and 2011, Laguna Honda Hospital administrators and staff used money from the hospital’s patient gift fund to throw a party. And then they spent it on airfare. And then they gave laser-engraved pedometers to the staff. All told, they spent nearly $350,000 meant for the dying and the infirm, nearly half of the total funds.

The incident was big, messy, and out in the public eye. It was an all-too-rare glimpse into the shady use of public funds by public officials. But when hospital staff members Dr. Derek Kerr and Dr. Maria Rivero blew the whistle on Laguna Honda’s misuse of patient funds in 2010, they were drummed out of their jobs.

Eventually litigation on behalf of the whistleblowers and their complaints of corruption were found to have merit.

Kerr’s vindication came at a meeting of the Health Commission in April 2013. In the packed City Hall meeting room, the public watched as Laguna Honda Executive Director Mivic Hirose read her apology to Kerr and Rivero aloud, even announcing a plaque in Kerr’s honor.

“The hospital will install the plaque in the South 3 Hospice,” she read, stiltedly, from a written statement, surrounded by microphones at the podium. “The plaque will say: In recognition of Derek Kerr MD of his contributions to the Laguna Honda’s hospice and palliative care program 1989-2010.”

Kerr received a settlement of $750,000 and something more important: His good name cleared.

But that conflict of interest was rooted out only after years of litigation that revealed the financial abuse through legal discovery of the department’s documents — documents that should’ve been public in the first place. ABC 7’s I-Team broke the story and did much of the reporting at the time, otherwise the entire affair may have been swept under the rug.

The misuse of funds was only brought to light with the revelation of public documents — revelations not possible with most Friends groups. The Laguna Honda Hospital Foundation has also had financial dealings with potential conflicts and a lack of transparency.

The now-defunct LHHF’s board chair, former City Attorney Louise Renne, made an interesting choice for her vice chair after she formed the nonprofit in 2003. Derek Parker was vice chair of the LHHF while simultaneously heading architecture firm Anshen-Allen, with a $585 million city contract to rebuild the hospital.

So he was not only rebuilding Laguna Honda under city contract, but soliciting and spending donations meant to supplement his project. Renne wrote to the Health Commission in December 2011 that LHHF’s purpose was to manage over $15 million in donations meant to furnish the hospital with beds, chairs, and other necessities. Eventually, then-Mayor Willie Brown found funding for the hospital, reducing the foundation’s role.

In a phone interview with the Guardian, Renne said the goals of the LHHF were only ever to furnish the newly christened hospital. “Our purpose was to fill the void, if you will, for what the city and its services could not do,” she said.

But in her letter, Renne advocated for LHHF to take an active role in fundraising for the hospital for years to come. “Today, the members of the Board of Directors of the Foundation continue to assist the hospital in various phases of its new projects and operations with projects approved by the City and/or the hospital administration,” she wrote to the Health Commission.

And Parker would have potentially managed millions of dollars flowing through donations for countless other hospital projects, while heading an architectural firm with contracts to build in San Francisco. We were unable to reach Parker for comment.

“I never saw Derek use his position as an architect or position for any political gain, I never saw it,” Renne told us. But no one else would see it either, because organizations like the now closed Laguna Honda Hospital Foundation operate without public oversight.

The Health Commission itself even noted this in its March 2012 meeting, the minutes describing then-commissioner James Illig as critiquing the foundation for not being open about its source of funding.

“Commissioner Illig thanks Ms. Renne and Mr. Parker for coming to the Commission,” the minutes read. “Because (LHHF) is a project of Community Initiatives, a fiscal sponsor for nonprofits, it is not possible to find basic financial information about the Foundation or its activities.”

Divided interests on hospital board

Due to a quirk of her foundation being under the “umbrella” of a separate entity, Community Initiatives, Illig was never able to even get the LHHF’s IRS forms, he told us. “We tried to get information and reports, and the Community Initiatives [Form] 990 was giant,” Illig said. “It didn’t separate anything out.”

Illig told us that it made sense to have Parker on the board because he is monied and well connected, making it easier to solicit donations. But insiders close to the board told us that Parker’s position may have made it easier to swing getting other contracts for his firm.

Parker got another city contract building the UCSF Benioff Children’s Hospital at Mission Bay, slated to open in 2015. No doubt his firm got the job partly due to his reputation as pioneering architecture that leads to healthy patient outcomes — but then again, the board he served on also approved donations to research at UCSF.

Laguna Honda Hospital Foundation may now be defunct, but it serves to illustrate the lack of controls and oversight of the foundations beyond even gift disclosure.

 

OFF THE BOOKS

It might be characterized as a web of influence, cronyism, or just the way business is done. But is there something improper about all of this?

Private funding often represents a needed boost that allows for important work to take place beyond what could happen under ordinary budgeting. At the same time, it smacks of privatization. While departments and funders point to lean times in the public sector to justify the need for this help, the funding continues to flow whether it’s a good year or a bad year for city government. And at the end of the day, the most glaring issue of all seems to be the lack of transparency.

Are city departments ever tempted to bend the rules to lend a little help to their Friends? As long as the funding is in the dark, the public has no way of knowing.

Ethics chief St. Croix told us his office lacks the resources to visit every city website and check up on whether departments are following the disclosure rules. “If someone brought it to my attention that a department received a gift and didn’t post it [on the website],” he said, “we would look into it.”

But if the watchdogs need watchdogs, citizens who can’t even review documents that should be publicly available, then these quasi-governmental functions and the people who fund them will remain in the shadows.  

Danielle Parenteau contributed to this report.  

ADDENDUM  

When city funders operate in the dark, one of the best ways to learn about corrupt influence, misuse of funds, and other transgressions is from whistleblowers. If you have a tip for us, send us snail mail at SAN FRANCISCO BAY GUARDIAN, 225 Bush, 17th Floor, San Francisco, CA 94104. Or email us at news@sfbg.com. Just make sure not to use an email address provided by your workplace, which is less secure.